credit card debt

ok, ready for this one?

if you have credit card debt, you can’t afford what you’re buying. it’s worth repeating: if you have credit card debt, you can’t afford what you’re buying.

now that statement may not make me any friends and believe me, i’m not trying to preach. but if credit card debt is part of your financial world, it’s not a good sign plain and simple.

now some financial advisors would disagree with me when i say that if you wanna use a credit card and pay the balance off each month have at it.  earn points, get cash back, frequent flyer miles, whatever, ok.  but buying things we can’t afford. wracking up debt.  paying even a nickel of interest. no no. bad.

think of it as a symptom. it’s not a sign of financial strength and health.  instead it’s a symptom of a problem. sorry but it is.

good news is the cure is easy. pay it off.  cut it up. and you’re done! that may seem like over simplification but it’s really not. where there’s a will there’s a way. so…

get rid of it. pay cash. use a debit card. you’ll feel better and be in a much better place.

’til next time: cash is king.

impulsiveness and instant gratification

(hint: these are traits that won’t help your finances.)

buying things at the store (or on ebay, or amazon…) that weren’t on your list, or credit card debt, eating too much, changing the course of your life suddenly and repeatedly (sometimes with regret), all are results of impulsiveness and instant gratification (there is a reason, after all, that stores surround checkout counters with items that are intended to make you say, “oh, i need one of those!”).

don’t get me wrong, i love instant gratification. however, that trait in myself is not going to help me financially, and these kinds of behaviors are not going to benefit you either. Continue reading

the power of compounding interest

here’s one financial tool where time is definitely on your side!

let’s say you have a dollar in the bank earning interest. well, tomorrow you’ll have that original dollar PLUS the interest it earned, and guess what? they’re BOTH earning interest. the day after that, the original dollar and TWO days of interest will be earning interest, and so on and so on. this majorly simplified example explains the power of compounding interest. your money COMPOUNDS, and as it does, all of it earns interest. Continue reading

expense ratios

this is one area of investing that a lot of folks never think about.

every time you buy mutual funds (whether in your IRA,  401K, or non-retirement investment account), there is an “expense ratio” or annual fee that you are charged for management of the account. many people are not aware that they even exist, but they do and, in fact, are standard. expense ratios vary widely, and since they’re charged annually as a percentage of the money you have invested, over the course of years (or even decades) they can really add up. Continue reading

losing larry

yesterday, on the street where i live, we lost an absolute staple of the neighborhood: larry, my 94-year-old neighbor. he died after living on the block for more than 60 years. his wife Grace, the love of his life, died a few years back. they were together since they were teenagers and he never got over losing her. almost every time we spoke, he told me how much he missed her. Continue reading